Value Magic – Pricing Your Home
Pricing a home correctly is one of a Realtor’s most critical jobs. The average seller gets about 95 percent of their original listing price, but I’m more accurate than that. Getting buyers to pay closer to, or slightly above the listing price is where the real magic happens. When the price and the value line up, buyers can tell it’s a good price, which attracts even more buyers, and together they bid up the well-priced home because of the competition.
To set an accurate price, I use a tool called a Comparable Market Analysis (CMA). Properly answering the question, “How much is my home worth?” is 80 percent of getting a property sold. I do a particularly good job ﬁguring out what homes will sell for, better than most agents by far.
A CMA is not what Zillow.com has to say a home is worth. Zillow is often 10-20 percent off-base. No one from Zillow ever sees the comparable homes and computers are not yet able to accurately mimic the human process of valuing a home. Each year I visit 1,000 homes Santa Barbara, Montecito, Goleta and Carpinteria so that I can do accurate CMA’s. To compare homes accurately you need to evaluate the homes in person.
Four big factors drive my CMA’s. I compare homes based upon location, condition, size and time. I’ll gladly share some of my nuggets for valuing a home.
Location is the ﬁrst factor. For instance, on the Mesa we have three elementary schools. There is a hierarchy depending on whether you are in Washington, Monroe or McKinley school attendance area. Here is the breakdown: Washington is worth about 5 percent more than Monroe and Monroe is worth about 3 percent more than McKinley. There is an 8 percent spread across the Mesa based upon school area alone.
Cliff Drive is a divide of about 5 percent with the higher price nod going to the water side of Cliff. Meigs Road, Cliff Drive, Loma Alta, and Flora Vista all suffer 8-10 percent loss of value compared to quiet non-busy locations. There is a 50 to 100 percent premium for being on the park front or bluff. Water proximity value falls off pretty quickly by the time you get to the fourth or ﬁfth house away from the beach.
After location, I adjust for condition, the upgrades, the kitchens, baths, updating, etc. Walking through and seeing the homes makes a big difference here.
Then comes size. For most homes on the Mesa I use $150 per square foot to compare bigger and smaller homes. You cannot build for $150 per square foot, but it can be the proper amount for comparison of existing tract homes. In Montecito I sometimes use $500 per square foot, or more, so it varies depending upon what is being evaluated.
The ﬁnal adjustment is time. I track how much the market is going up, or down, each month. The further back in time a comparable home sold, the more I add on to adjust for the market increasing after that date. On the Mesa, homes were going up 1 percent a month until about February of this year when that trend peaked.
Finally, there can be add-ons for the “emotion” of a home. This means that the special features, such as a large lot, a view, or other features may appeal to a well-heeled buyer. On the down side there are factors such as stairs, lack of parking, shared driveways, unpermitted improvements, neighbor blight, and awkwardness of the ﬂoor plan. It takes experience with these factors to come up with a proper adjustment.
During the past year my sellers received 101 percent of their asking price. That is a 6 percent better price than the average MLS agent achieved. What could you do with an extra 6 percent? Please call me when you want to talk about the value magic of your home.
“Scott Williams proved to be an exceptional real estate agent who was prepared from the very ﬁ rst meeting, knowledgeable about the real estate market in Santa Barbara, and an excellent communicator. Scott kept us informed every step of the way and was always available for calls, texts, and emails. In short, Scott made a long-distance real estate sale easy and painless. We were particularly pleased with the results! We felt comfortable
with Scott and trusted his judgement.”
— Julene Tomberg
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